Australian Securities & Investments Commission v GDK Financial Solutions Pty Ltd (in liq) (No 9)

In the case of Australian Securities & Investments Commission v GDK Financial Solutions Pty Ltd (in liq) (No 9), the applicants, the Mews Receivers and Liquidators of WRVM, sought approval for a funding agreement to enable further litigation regarding an unregistered managed investment scheme known as the Mews Scheme. The scheme involved the establishment of a retirement village on the Mews land, which was owned by WRVM, a company that was also one of the promoters of the scheme. The applicants sought to enter into a funding agreement using the proceeds from the sale of the Mews land, held in the Mews Fund, to fund the litigation. The legal issues before the court included whether the funding agreement was in the best interests of the investors in the Mews Scheme and whether the proposed terms were appropriate.

The court considered the potential for success of the litigation, the lack of funds available to WRVM, and the benefits to the investors in the Mews Scheme if the litigation was successful. The court also considered the need for the funding agreement to be in the best interests of the investors and the importance of ensuring that the proceeds of any successful litigation would be paid into the Mews Fund. The court concluded that the funding agreement was in the best interests of the investors and that the proposed terms were appropriate, subject to certain conditions, including a cap on the funding amount and conditions for applying for further funds. The court also noted the importance of ensuring that the Memorandum of Advice prepared by Blake Dawson was kept confidential to protect the interests of the investors.

The court granted the applicants' orders, allowing the Mews Receivers and Liquidators to enter into a funding agreement with WRVM in their respective capacities. The funding was capped at $300,000, with liberty to apply for further funds on notice to the seventh defendant. The court also ordered that the costs incurred by the Mews Receivers in the course of the application be considered properly incurred in the performance of their duties. Finally, the court ordered that the Memorandum of Advice be placed in a sealed envelope and that any application to inspect the document be referred to a judge of the Court.